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Now more than ever, going to court is a time-consuming and expensive way to resolve disputes. Along with other barriers, these issues make effective dispute resolution appear incredibly inaccessible to the everyday New Zealander. Alternatively, you may wish to consider engaging in online dispute resolution (ODR). This article will outline:

  • what ODR is;
  • the two most common forms of ODR; and
  • its benefits and issues in New Zealand.

What Is Online Dispute Resolution?

ODR is an increasingly popular method of resolving disputes. It refers to using the internet, or digital software, to help resolve conflicts between parties. There are two key ways in which ODR operates. Both procedures draw on alternative dispute resolution methods, such as mediation, arbitration and negotiation.  

Online Disputes

Initially, ODR was a way to resolve issues that exclusively began and continued online. These concerns were usually in regards to e-commerce issues, such as the sale of goods online. 

For example, blind bidding helped resolve online disputes between the vendor and purchaser of goods concerning price. Under the blind bidding process, the vendor of the good must list three amounts or ‘bids’, with the smallest amount being the lowest that they are willing to accept for the good. Likewise, the purchaser lists three bids, with the highest being the most they will pay for that good. Each bid is matched, and the dispute will be resolved if there is some common ground. 

Offline Disputes

ODR now also encompasses settling disputes that have occurred entirely offline. These resolution methods merely translate an alternative dispute resolution process onto an online format. For example, you can engage in:

There are also resolution methods to offline disputes that have been developed specifically for the digital space. These methods either incorporate both human and artificial intelligence (AI), by an AI assisting a mediator for example, or are entirely reliant on AI. 

One such method is automated negotiations. In an automated negotiation, an AI will automate potential outcomes for the conflicting parties. These outcomes then assist the parties in coming to a final solution or agreement. This AI will be programmed to incorporate fairness and the parties interests into these potential outcomes. 

Why Use Online Dispute Resolution?

ODR accompanies a wide array of benefits not available in litigation or alternative dispute resolution methods. 

Cost-Saving

ODR is generally a far more affordable approach to dispute resolution, particularly in comparison to going through the court system. This cost reduction is due to:

  • the fact that you do not have to hire a lawyer when participating in ODR; and
  • the procedural fees to use an online service, in comparison to court fees, are far cheaper. 

Time-Saving

The court systems in New Zealand are notoriously slow, due to the amount of time it takes to undergo the application process, the court case itself and to get a judgment back. There is also the issue of a growing backlog in the court system.

The structure of ODR aims to achieve quick and efficient settlements of disputes. Particularly for automated approaches to dispute resolution, it is common to receive a solution or outcome immediately or shortly after parties conclude the process.

Convenient

ODR is also far more convenient than litigation. As there is no fixed location at which the resolution process occurs, ODR can operate at a time and place that is most convenient for you.

This increased flexibility also means that you do not have to take time off work to engage in dispute resolution services. Similarly, you do not have to complete the entire resolution process in one sitting, as you have to with a court case. 

Increased Access to Justice

The above factors mean that ODR enables many people to exercise their rights and access justice. Through the accessible nature of ODR, individuals are not restrained from settling their disputes by:

  • financial status; 
  • geographical location; 
  • time constraints; or
  • disability.

Issues With Online Dispute Resolution

However, some issues accompany ODR.

Lack of Technology Literacy

As ODR occurs online, it is inaccessible to those that do not have an internet connection or do not feel comfortable using digital technology. Individuals or communities unable to access or confidently use ODR are still constrained to the more traditional approaches to resolving conflicts.

Privacy Concerns

Even a well-designed ODR system will have vulnerabilities that could be exploited by others. As it operates online, there is always a risk that an unauthorised party may access confidential or personal information that parties exchange in ODR.

Key Takeaways

If you are in dispute, you may be considering using litigation or an alternative method of dispute resolution. However, there may be certain barriers, such as time constraints or legal fees, that prevent you from doing so. Online dispute resolution uses the internet and digital software to resolve disputes between parties. These processes can be just as effective as more traditional dispute resolution methods but are cheaper, more accessible and flexible. 

If you are interested in engaging in online dispute resolution, contact LegalVision’s dispute and litigation lawyers on 0800 005 570 or complete the form on this page. 

Frequently Asked Questions

What is online dispute resolution?

Online dispute resolution refers to using the internet, or digital software, to help resolve conflicts between parties. These disputes may be contained entirely online, or have occurred offline.

What is the best alternative dispute resolution?

The best form of alternative dispute resolution will entirely depend on your personal circumstances, the amount of time and resources you wish to invest in your claim and who you wish to facilitate the resolution.

How does online dispute resolution work?

Online dispute resolution can operate in two ways. It can either be an online version of alternative dispute resolution methods, such as mediation, or occur through a specific online procedure. Under this procedure, an individual, such as a mediator, may be facilitated by AI, or the process may be entirely reliant on AI.

What are the methods of alternative dispute resolution?

The most common methods of alternative dispute resolution are: mediation; negotiation; and arbitration.

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